KENANGA ANNUAL REPORT 2017

50. FINANCIAL RISK MANAGEMENT (CONT’D.) (b) Market risk (cont’d.) (i) Interest rate risk (cont’d.) Interest rate sensitivity analysis The following table demonstrates the impact of a +/– 100 basis points change in interest rates, ceteris paribus, on the Group’s profit or loss and equity. Change in Impact on Change in Impact on Interest Profit or Impact on Interest Profit or Impact on Rates Loss Equity * Rates Loss Equity 2017 2017 2017 2016 2016 2016 RM’000 RM’000 RM’000 RM’000 +100 (10,153) (35,453) +100 (6,453) (28,503) -100 10,153 35,453 -100 6,453 28,503 * exclude tax impact (ii) Foreign currency exchange risk Foreign currency risk is the risk of financial loss due to adverse movements in foreign exchange rates. The Group is exposed to currency risk primarily through trading activities that are governed by the Foreign Exchange Risk Management policy. Currency rate sensitivity analysis The following table shows the impact of a 5% movement of MYR, ceteris paribus, on the Group’s profit/loss: Currency Changes in Foreign Exchange Rates Impact on Profit or Loss 2017 Impact on Equity 2017 Changes in Foreign Exchange Rates Profit or Loss 2016 Impact on Equity 2016 RM’000 RM’000 RM’000 RM’000 AUD 5% 3 – 5% (4) – CHF 5% 1 – 5% 1 – CNY 5% 8 – 5% 4 – EUR 5% (65) – 5% (21) – GBP 5% (20) – 5% 16 – HKD 5% 170 – 5% 6 – IDR 5% – – 5% – – JPY 5% (69) – 5% (15) – NZD 5% 13 – 5% 5 – PHP 5% – – 5% 1 – SGD 5% (193) – 5% 191 – THB 5% 2 – 5% 9 – USD 5% 287 – 5% 143 – Arising from the Group’s investment in the associate company in Saudi Arabia, there is a natural position held in foreign currency exposure in Riyal. The following shows the profit or loss impact of a 5% price movement on this position: SAR 5% – (2,974) 5% – (3,578) Kenanga Investment Bank Berhad 31 December 2017 198 notes to the financial statements